BI to hand down forex monitoring ruling next month
BI to hand down forex monitoring ruling next month
JAKARTA (JP): Bank Indonesia deputy governor Achjar Iljas said
on Monday a new central bank regulation setting the minimum
amount of foreign exchange transfer to or from the country that
is subject to compulsory reporting would be issued next month at
the latest.
"It will be completed in one or two months. We're still
seriously discussing it, because we don't want it to have to be
revised soon after its issuance," he said on the sidelines of a
hearing with House Commission VIII for the state budget and
finance.
Achjar explained that deciding on the minimum amount of forex
transfer that required reporting was a challenge.
"If the minimum amount is set too low it would be cumbersome,
but it is set too high many transactions would evade the
compulsory reporting," he said.
He said because the reporting system would initially be paper-
based, if the minimum amount was set too low the paperwork would
be phenomenal.
Achjar said the important thing was to design a reporting
system in such a way that statistics resulting from the reporting
would be useful for monitoring the forex flow.
Asked if the central bank would set the minimum amount at
US$10,000, as is the case in the U.S., he said: "That amount is
too high for our economy."
The House of Representatives passed a bill in April that
empowers Bank Indonesia to monitor the flow of forex, by
requiring all transfers of capital in and out of the country to
be reported.
The law on the forex flow stipulates that every person or
legal entity within the country is required to inform banks or
other parties appointed by Bank Indonesia about the transfer or
flow of a certain amount of foreign currency or rupiah to or from
the country.
The minimum transfer amount that requires reporting would be
set under a central bank regulation.
The monitoring system is deemed necessary as a preventive
measure to help avoid a currency crisis, such as the one that hit
the country in August 1997.
Achjar said in addition to a forex monitoring ruling, the
central bank would also soon introduce 12 new regulations,
including a ruling on the obligation to use rupiah currency in
certain transactions.
He said the central bank had so far issued two new rulings
this year, including a ruling on the maximum amount of Bank
Indonesia liquidity support to troubled banks, based on its role
as the lender of the last resort as stipulated by the new central
bank law.
Another Bank Indonesia official, who requested anonymity, said
that in addition to the forex transfer amount, the compulsory
reporting should also mention the type of foreign currency, the
purpose of the transfer and the source of the revenue, names of
receiving and sending parties, and the countries of origin and
destination of the money.
"These requirements are aimed at curbing money laundering,"
the source said.(rei)
JAKARTA (JP): Bank Indonesia deputy governor Achjar Iljas said
on Monday a new central bank regulation setting the minimum
amount of foreign exchange transfer to or from the country that
is subject to compulsory reporting would be issued next month at
the latest.
"It will be completed in one or two months. We're still
seriously discussing it, because we don't want it to have to be
revised soon after its issuance," he said on the sidelines of a
hearing with House Commission VIII for the state budget and
finance.
Achjar explained that deciding on the minimum amount of forex
transfer that required reporting was a challenge.
"If the minimum amount is set too low it would be cumbersome,
but it is set too high many transactions would evade the
compulsory reporting," he said.
He said because the reporting system would initially be paper-
based, if the minimum amount was set too low the paperwork would
be phenomenal.
Achjar said the important thing was to design a reporting
system in such a way that statistics resulting from the reporting
would be useful for monitoring the forex flow.
Asked if the central bank would set the minimum amount at
US$10,000, as is the case in the U.S., he said: "That amount is
too high for our economy."
The House of Representatives passed a bill in April that
empowers Bank Indonesia to monitor the flow of forex, by
requiring all transfers of capital in and out of the country to
be reported.
The law on the forex flow stipulates that every person or
legal entity within the country is required to inform banks or
other parties appointed by Bank Indonesia about the transfer or
flow of a certain amount of foreign currency or rupiah to or from
the country.
The minimum transfer amount that requires reporting would be
set under a central bank regulation.
The monitoring system is deemed necessary as a preventive
measure to help avoid a currency crisis, such as the one that hit
the country in August 1997.
Achjar said in addition to a forex monitoring ruling, the
central bank would also soon introduce 12 new regulations,
including a ruling on the obligation to use rupiah currency in
certain transactions.
He said the central bank had so far issued two new rulings
this year, including a ruling on the maximum amount of Bank
Indonesia liquidity support to troubled banks, based on its role
as the lender of the last resort as stipulated by the new central
bank law.
Another Bank Indonesia official, who requested anonymity, said
that in addition to the forex transfer amount, the compulsory
reporting should also mention the type of foreign currency, the
purpose of the transfer and the source of the revenue, names of
receiving and sending parties, and the countries of origin and
destination of the money.
"These requirements are aimed at curbing money laundering,"
the source said.(rei)